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In Ontario, it is possible to obtain car insurance coverage even if you owe money to another company. However, you will need to disclose this information to your insurance provider when applying for coverage, as failing to do so can result in your policy being voided or cancelled.

When you owe money to another company, such as an auto finance company, this is typically referred to as a lien on your vehicle. The lienholder has a financial interest in your vehicle, and they may require you to maintain a certain level of insurance coverage as a condition of your loan or lease agreement.

When you apply for car insurance coverage, you will need to disclose any liens on your vehicle, including the name and contact information of the lienholder. Your insurance provider will then take this into account when determining your premium and coverage options.

If you do not disclose a lien on your vehicle and your insurance provider finds out later, this can have serious consequences. Your policy may be voided or cancelled, and you may have difficulty obtaining insurance coverage in the future.

If you’re unsure about how to proceed or have any questions about obtaining car insurance coverage in Ontario, it’s a good idea to speak with an insurance agent or broker who can provide you with more information and guidance.

Does A Lapse In Insurance Affect Insurance Rates?


Yes, a lapse in insurance coverage can affect your insurance rates in a few ways.

First, when you apply for car insurance, insurance companies will typically ask you if you have had any lapses in coverage in the past. If you have, this can be seen as a red flag, as insurance companies may view this as a sign that you are a higher risk driver. As a result, they may charge you higher premiums to compensate for this perceived risk.

Second, if you have a lapse in coverage and then later decide to purchase insurance again, insurance companies may charge you higher premiums because of the increased risk that you represent. This is because a lapse in coverage can indicate to insurers that you are more likely to get into an accident or file a claim.

Finally, if you have a lapse in coverage and then get into an accident, your insurance rates may go up significantly. This is because insurance companies may view you as a higher risk driver and may increase your rates to compensate for the increased risk.

Overall, maintain continuous insurance coverage to avoid any potential negative effects on your insurance rates. If you do experience a lapse in coverage, it’s a good idea to shop around for insurance and compare rates from different providers to find the most affordable coverage option.

Can Insurance Companies Check Your Previous Insurance Payments?

Insurance companies can check your previous insurance payments by accessing your insurance claims history, which is often referred to as a CLUE report (Comprehensive Loss Underwriting Exchange report). This report contains information about your previous insurance claims and payments, including any claims you have filed and any payments you have made to insurance companies in the past.

Insurance companies use this information to assess your risk level as a driver or homeowner and determine how much to charge you for insurance coverage. If you have a history of making late payments or have a high number of insurance claims, for example, this may make you a higher risk and result in higher premiums.

However, insurance companies are required to follow certain privacy laws and regulations when accessing and using your personal information. They must obtain your consent to access your CLUE report or any other personal information, and they are prohibited from using this information for any purposes other than underwriting and pricing insurance policies.

Review your own insurance claims history periodically to ensure that it is accurate and up-to-date. If you find any errors or inaccuracies in your CLUE report, you can request that the information be corrected or removed.

Will You Be Charged For A Late Payment Grace Period?

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Late payment grace periods vary between insurance companies, but generally, you will not be charged for a late payment during the grace period.

A grace period is a specified amount of time after your insurance premium is due, during which you can make a late payment without incurring any additional fees or penalties. This grace period is intended to give you some flexibility and prevent your insurance policy from lapsing due to a missed payment.

If you miss the grace period and fail to make your payment on time, you may be charged a late fee or penalty by your insurance company. This fee could be a flat amount or a percentage of your premium, and it can vary between insurance companies and policy types.

To avoid late fees and penalties, make your insurance payments on time, or as soon as possible if you miss the due date. If you’re having trouble making a payment, you can contact your insurance company to discuss payment options or to request a payment plan to help you manage your payments.

What Happens When Your Insurance Policy Is Canceled For Non-payment?

When your insurance policy is canceled for non-payment, it means that your insurance company has terminated your policy because you have failed to pay your premiums on time. Here are some of the possible consequences:

  1. Loss of Coverage: When your policy is canceled, you lose your insurance coverage. This means that you will no longer be protected against any losses, damages or liabilities that may arise.
  2. Difficulty Finding Coverage: A policy cancellation can make it more difficult to obtain coverage in the future, as many insurance companies consider canceled policies a red flag. You may have to pay higher premiums or be denied coverage altogether.
  3. Refunds: If you have already paid your premiums in advance, your insurance company may refund a prorated amount for the time that your policy was active before it was canceled.
  4. Legal Consequences: If you continue to drive a vehicle or own a property without insurance coverage, you may be breaking the law. In the event of an accident or incident, you may be liable for any damages or injuries that occur, and you may face legal and financial consequences.

Insurance is a contract, and you have an obligation to pay your premiums in exchange for coverage. If you’re having trouble making your payments, it’s important to contact your insurance company as soon as possible to discuss payment options or to request a payment plan to help you manage your payments.

How Do I Make Sure That I Don’t Miss an Insurance Payment?

Here are some tips to help you avoid missing an insurance payment:

  1. Set Up Auto-Pay: Many insurance companies offer automatic payment options, which can help ensure that your premium is paid on time each month. You can set up automatic payments from your bank account or credit card, which will automatically deduct your premium payment each month.
  2. Use Reminders: Set up reminders for yourself to ensure that you don’t forget to make your payments. You can use a calendar app, reminder app or set reminders on your phone to notify you when your payment is due.
  3. Budget for Premiums: Make sure you include insurance premiums in your monthly budget. This will help ensure that you have enough money to make your payments on time.
  4. Know Your Due Date: Be aware of your payment due date and mark it on your calendar. Many insurance companies also send out reminder notices a few days before your payment is due.
  5. Consider Bundling: If you have multiple insurance policies (such as auto and home insurance), bundling them with the same company can simplify the payment process and make it easier to remember when your payments are due.
  6. Contact Your Insurance Company: If you are having difficulty making your payment, contact your insurance company to discuss payment options. They may be able to offer a payment plan or other options to help you manage your payments.

By following these tips, you can help ensure that you don’t miss an insurance payment and maintain continuous coverage.

If I Want To Go Back To The Same Insurance Company Do I Have To Pay What I Owe?

go back

If you want to go back to the same insurance company that you previously had coverage with, you may be required to pay any outstanding balances or past due payments before your coverage can be reinstated. This is because insurance companies generally require that all outstanding payments be made before they will renew or reinstate a policy.

If you have an outstanding balance with your previous insurance company, you may be able to negotiate a payment plan or settlement with them to help you get caught up on your payments. This may involve paying off the balance in full, or making partial payments over a period of time until the balance is paid off.

If you are unable to pay the outstanding balance or come to an agreement with your previous insurance company, you may need to consider other insurance options. However, it’s important to note that having a history of missed payments or canceled policies can make it more difficult to obtain insurance coverage in the future, as insurance companies view this as a higher risk.

About the Author: Ashley Miller

Ashley is an insurance content professional and very knowledgeable on all related subjects. Ashley has over 12 years of insurance content writing experience working with various insurance companies throughout her career.